MSCI Inc
For the period ended Dec 31, 2023. Filed Feb 9, 2024.
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FY2023 · Filed Feb 9, 2024
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9. Goodwill and Intangible Assets, Net
- GOODWILL AND INTANGIBLE ASSETS, NET
The following table presents goodwill by reportable segment:
| (in thousands) | Index | Analytics | ESG and Climate | All Other - Private Assets | Total |
|---|---|---|---|---|---|
| Goodwill at December 31, 2021 | $1,205,443 | $290,976 | $48,047 | $691,920 | $2,236,386 |
| Acquisitions⁽¹⁾ | — | — | — | (541) | (541) |
| Foreign exchange translation adjustment | (3,821) | — | — | (2,354) | (6,175) |
| Goodwill at December 31, 2022 | $1,201,622 | $290,976 | $48,047 | $689,025 | $2,229,670 |
| Acquisitions⁽2⁾ | — | — | 34,912 | 618,415 | 653,327 |
| Foreign exchange translation adjustment | 1,813 | — | 1,765 | 1,117 | 4,695 |
| Goodwill at December 31, 2023 | $1,203,435 | $290,976 | $84,724 | $1,308,557 | $2,887,692 |
(1)Reflects the impact of the acquisition of RCA.
(2)Reflects the impact of the acquisitions of Burgiss and Trove.
Intangible Assets, Net
The following table presents the amount of amortization expense related to intangible assets by category for the periods indicated:
| Years Ended | |||
|---|---|---|---|
| (in thousands) | December 31, 2023 | December 31, 2022 | December 31, 2021 |
| Amortization expense of acquired intangible assets | $72,303 | $63,370 | $42,242 |
| Amortization expense of internally developed capitalized software | 42,126 | 27,709 | 22,337 |
| Write-off of internally developed capitalized software | — | — | 16,013 |
| Total amortization of intangible assets expense | $114,429 | $91,079 | $80,592 |
Following management’s decision to discontinue development and cease related sales activities of certain Analytics segment products and transition existing customers to other product offerings, the Company wrote off $16.0 million of certain internally developed capitalized software intangible assets (consisting of $46.3 million of gross intangible assets less $30.3 million of accumulated amortization) during the year ended December 31, 2021. The non-cash charge is recorded as a component of “Amortization of intangible assets” on the Consolidated Statement of Income.
The gross carrying and accumulated amortization amounts related to the Company’s intangible assets were as follows:
| As of | |||
|---|---|---|---|
| (in thousands) | EstimatedUseful Lives | December 31, 2023 | December 31, 2022 |
| Gross intangible assets: | |||
| Customer relationships | 13 to 21 years | $712,400 | $532,500 |
| Proprietary data | 11 to 13 years | 458,717 | 220,778 |
| Internally developed capitalized software | 3 to 5 years | 237,760 | 165,928 |
| Acquired technology and software | 3 to 9 years | 228,220 | 209,220 |
| Trademarks | 1 to 21.5 years | 209,090 | 208,190 |
| Subtotal | 1,846,187 | 1,336,616 | |
| Foreign exchange translation adjustment | (9,410) | (13,214) | |
| Total gross intangible assets | $1,836,777 | $1,323,402 | |
| Accumulated amortization: | |||
| Customer relationships | $(340,922) | $(308,437) | |
| Proprietary data | (62,590) | (41,783) | |
| Internally developed capitalized software | (118,387) | (77,259) | |
| Acquired technology and software | (189,174) | (179,833) | |
| Trademarks | (171,715) | (162,044) | |
| Subtotal | (882,788) | (769,356) | |
| Foreign exchange translation adjustment | 2,245 | 4,471 | |
| Total accumulated amortization | $(880,543) | $(764,885) | |
| Net intangible assets: | |||
| Customer relationships | $371,478 | $224,063 | |
| Proprietary data | 396,127 | 178,995 | |
| Internally developed capitalized software | 119,373 | 88,670 | |
| Acquired technology and software | 39,046 | 29,387 | |
| Trademarks | 37,375 | 46,146 | |
| Subtotal | 963,399 | 567,260 | |
| Foreign exchange translation adjustment | (7,165) | (8,743) | |
| Total net intangible assets | $956,234 | $558,517 | |
Estimated amortization expense for succeeding years is presented below:
| Years Ending December 31,(in thousands) | AmortizationExpense |
|---|---|
| 2024 | $153,026 |
| 2025 | 127,085 |
| 2026 | 91,753 |
| 2027 | 67,234 |
| 2028 | 65,307 |
| Thereafter | 451,829 |
| Total | $956,234 |
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